Earnings per share

12 Months Ended

Dec. 31, 2013

Notes To Financial Statements [Abstract]

Earnings per share

15 – Earnings per share

On October 22, 2013, the Board of Directors of the Company approved a two-for-one common stock split in the form of a stock dividend of one additional common share of CN for each share outstanding, which was paid on November 29, 2013, to shareholders of record on November 15, 2013. All share and per share data presented herein reflect the impact of the stock split. The following table provides a reconciliation between basic and diluted earnings per share:

In millions, except per share data	Year ended December 31,		2013		2012		2011
Net income		$	2,612	$	2,680	$	2,457
Weighted-average shares outstanding			843.1		871.1		902.2
Effect of stock options			3.0		4.3		6.7
Weighted-average diluted shares outstanding			846.1		875.4		908.9
Basic earnings per share		$	3.10	$	3.08	$	2.72
Diluted earnings per share		$	3.09	$	3.06	$	2.70

Basic earnings per share are calculated based on the weighted-average number of common shares outstanding over each period. Diluted earnings per share are calculated based on the weighted-average diluted shares outstanding using the treasury stock method, which assumes that any proceeds received from the exercise of in-the-money stock options would be used to purchase common shares at the average market price for the period.